TD Bank will pay a $3 billion fine after pleading guilty to money laundering-related charges as federal prosecutors asserted the Canadian bank failed to adequately monitor signs of criminal activity.
Investigators from the Department of Justice found that TD Bank failed to monitor more than 90% of transactions between January 2018 and April 2024, thus enabling “three money laundering networks to collectively transfer more than $670 million through TD Bank accounts,” according to a legal filing.
TD Bank will pay a record $1.3 billion to the U.S. Treasury Department’s Financial Crimes Enforcement Network and also $1.8 billion to the Justice Department to settle its guilty plea of violating the Bank Secrecy Act.
Investigators found that a criminal known as “David” was working closely with a number of TD Bank employees who profited from assisting him in his money laundering, which came from selling drugs, including fentanyl.
“I want to be clear, these systemic failures did not just create hypothetical vulnerabilities, but they resulted in actual, material harm to American citizens and communities,” Deputy Treasury Secretary Wally Adeyemo said in a statement. “Time and again, unlike its peers, TD Bank prioritized growth and profit over complying with the law. The bank enabled drug trafficking.”
In one case, the employees collected more than $57,000 worth of gift cards to process more than $470 million in cash deposits from a money laundering network, and in return, they did not declare the money in required reports, the Department of Justice said.
As part of its settlement, TD Bank will be restricted in its financial growth and subjected to four years of monitoring by the Financial Crimes Enforcement Network.
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“The vast majority of financial institutions have partnered with FinCEN to protect the integrity of the US financial system. TD Bank did the opposite,” said Adeyemo. “From fentanyl and narcotics trafficking, to terrorist financing and human trafficking, TD Bank’s chronic failures provided fertile ground for a host of illicit activity to penetrate our financial system.”
The Canadian Bank shared last year that it was being investigated by the Justice Department. Bracing for a large fine, the bank sold 40.5 million shares of Charles Schwab stock, reducing its ownership in the banking and brokerage company from 12% to a little over 10%.